Los Cabos has established itself as one of Mexico’s premier real estate markets, attracting investors, vacationers, and expatriates alike. Its stunning beaches, world-class golf courses, and vibrant nightlife make it a desirable destination for tourists, while its growing economy and infrastructure improvements appeal to long-term residents.
Real estate investment opportunities in Los Cabos have surged in recent years, fueled by a booming tourism sector and an influx of foreign buyers. Investors often find themselves choosing between two rental strategies: short-term vacation rentals and long-term leases. Each has its own advantages and drawbacks, depending on investment goals, risk tolerance, and property management preferences. This blog explores both options in-depth to help you determine the best approach for your Los Cabos investment.
Short-term rentals (STRs) refer to properties rented out for brief stays, typically ranging from a few days to several weeks. These properties are commonly listed on platforms such as Airbnb and VRBO, catering to tourists seeking a temporary home away from home.
Los Cabos experiences a high tourist influx from November through April, with peak seasons around major holidays and events like spring break and fishing tournaments. During this time, STRs command premium rates, often significantly higher than long-term rental prices.
To maximize visibility and occupancy, STR owners list properties on online travel platforms such as:
Short-term rentals require frequent maintenance and hands-on management due to high turnover. Common needs include:
Los Cabos STRs can generate substantial income, particularly during peak seasons. However, profitability depends on factors such as location, property type, and occupancy rates. High-end beachfront villas can command nightly rates of $500-$1,500, while standard condos range from $150-$400 per night. Annual gross revenue potential varies, but well-managed STRs often yield 20-30% higher returns than long-term rentals.
Investors must comply with local rental regulations, which may include:
✔ Higher income potential ✔ Flexibility to use the property personally ✔ Opportunity to adjust rental rates based on demand
✘ Higher maintenance and operational costs ✘ Requires constant guest management ✘ Regulatory uncertainties
Long-term rentals (LTRs) are properties leased for extended periods, typically six months to several years. These rentals cater to residents who require stable housing and are less affected by seasonal tourism trends.
Rental rates vary by location:
Long-term tenants require thorough screening to ensure reliability. Property owners should:
Compared to STRs, long-term rentals have lower maintenance demands, but landlords must still handle:
While LTRs yield lower monthly rental income than STRs, they provide consistent cash flow without the unpredictability of seasonal fluctuations.
✔ Reliable, steady income ✔ Lower management and maintenance needs ✔ Less regulatory risk than STRs
✘ Lower income potential compared to STRs ✘ Longer eviction processes if tenants default ✘ Less flexibility to use the property
Both short-term and long-term rentals present viable opportunities in Los Cabos, depending on your investment goals. Short-term rentals offer higher revenue potential but require active management and regulatory navigation, while long-term rentals provide steady income with lower involvement. Investors should carefully assess their risk tolerance, management capacity, and financial objectives before choosing the best strategy. For personalized insights and expert guidance, working with a trusted real estate agency in Los Cabos can help maximize returns and streamline the investment process.
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The information shown in PESOS is solely based on the official conversion the date this newsletter was prepared. The offered price is in DOLLARS (US Currency) and in accordance with article 8 of the monetary law, the final price for recordation purposes will be converted into PESOS resulting from the official exchange rate on the date payment is due. In accordance with NOM 247, prices shown in DOLLARS can be converted into PESOS by accessing the following link and performing the corresponding arithmetic multiplication per the current exchange rate.https://www.banxico. org.mx/tipcamb/main.do?page=tip&idioma=en.
Conversión a PESOS sujeta a cambios. La información que se muestra en PESOS se basa únicamente en la conversión oficial en la fecha en que se preparó este boletín. El precio de oferta es en DÓLARES (moneda de los EUA) y de conformidad con el artículo 8 de la ley monetaria en vigor, el precio oficial a registrar en la escritura será el de PESOS que resulte del tipo de cambio oficial en la fecha que el pago sea obligatorio. De conformidad con la NOM 247, los precios en DÓLARES se pueden consultar en PESOS mediante la multiplicación aritmética del precio mostrado en DÓLARES por el tipo de cambio en vigor para solventar operaciones en dólares moneda de Los EUA. https://www.banxico.org.mx/tipcamb/ main.do?page=tip&idioma=sp
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